CMS Announces Proposed Improvements to Medicare Shared Savings Program

On January 28, CMS released a proposed rule to update the methodology used to measure the performance of Accountable Care Organizations (ACOs) in the Medicare Shared Savings Program. Key proposals include:

• Recognizing that health cost trends vary in communities across the country by using regional, rather than national, spending growth trends when establishing and updating an ACO’s rebased benchmark.
• Adjusting an ACO’s rebased benchmark when it enters a second or subsequent agreement period by a percentage (increased over time) of the difference between Fee-For-Service spending in the ACO’s regional service area and the ACO’s historical spending, which will provide a greater incentive for continued ACO participation and improvement.
• Giving ACOs time to prepare for benchmarks that incorporate regional expenditures by using a phased-in approach to implementation.

Other changes would include:

• Adding a participation option to facilitate an ACO’s transition to performance-based risk arrangements by allowing eligible ACOs to elect a fourth year under their existing first agreement and defer by one year entering a second agreement period under a performance-based risk track.
• Streamlining the methodology for adjusting an ACO’s benchmark when its composition changes.
• Clarifying the timeline and other criteria for reopening determinations of ACO shared savings and shared losses for good cause or fraud or similar fault.

For More Information:

• Proposed Rule – Submit comments until March 28, 2016
• Fact Sheet

See the full text of this excerpted CMS press release (issued January 28).

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.